United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

 

Decision

Matter of: W.B. Construction and Sons, Inc.

File: B-405874; B-405874.2

Date: December 16, 2011

Lynn Patton Thompson, Esq., Biggs, Ingram, Solop & Carlson, PLLC, for the 

protester.

Maj. John C. Dohn, Department of the Army, and Sam Q. Le, Esq., Small Business 

Administration, for the agencies.

Tania Calhoun, Esq., and Edward Goldstein, Esq., Office of the General Counsel, 

GAO, participated in the preparation of the decision.

DIGEST

Protest that contracting agency improperly awarded contract is sustained where the 

record reflects that the legal entity awarded the contract did not participate in the 

procurement and appears to be a different legal entity from the offering entity.

DECISION

W.B. Construction and Sons, Inc., of Pierre Part, Louisiana, protests the award of a 

contract to DQSI, Corporation, of Covington, Louisiana, under request for proposals 

(RFP) No. W9124E-11-R-0011, issued by the Department of the Army for various 

types of construction work at Fort Polk, Louisiana. W.B. Construction contends that 

the award was improper because the awardee was not the offering entity and does 

not exist, and because the offering entity is not an eligible 8(a) firm.

We sustain the protest.

BACKGROUND

The solicitation, issued July 29, 2011, contemplated the award of a fixed-price, 

indefinite-delivery/indefinite-quantity contract to an eligible 8(a) firm to provide, 

over multiple years, road repair, improvement, and infrastructure construction at 

DOCUMENT FOR PUBLIC RELEASE

The decision issued on the date below was subject to a 

GAO Protective Order. This redacted version has been 

approved for public release.
Page 2 B-405874, B-405874.2 

Fort Polk, and other areas.1 RFP at 1-5. Award was to be made to the offeror 

submitting the lowest-priced, technically acceptable proposal. RFP § M.a. The Army 

received proposals from five firms, including W.B. Construction and DQSI, LLC, by 

the September 26 closing date. The Army evaluated all five proposals as technically 

acceptable. DQSI, LLC proposed the lowest price of $38,555,017, followed by W.B. 

Construction’s price of $39,135,920.96. Army Motion to Dismiss, Oct. 19, 2011, 

Exhibit B; Army E-Mail, Nov. 28, 2011. 

Since this was a competitive 8(a) set-aside, the Army was required to ask the SBA 

district servicing the apparent successful offeror, DQSI, LLC, to determine that firm’s 

eligibility for award. 13 C.F.R. § 124.507(b). The contracting officer states that the 

Army sent SBA’s district office the commercial and government entity (CAGE) code 

and the data universal numbering system (DUNS) number listed in DQSI, LLC’s 

proposal, but not the name of the firm. Supplemental Contracting Officer’s (CO) 

Declaration ¶ 2. She states that the Army checked this same identifying information 

in the following databases: the Small Business Administration Dynamic Small 

Business Search, the Central Contractor Registry (CCR), and the Online 

Representations and Certifications Application (ORCA). Id. All of these database 

searches showed that the name of the firm was DQSI, Corporation and, where the 

information was present, that the firm’s legal structure was as a corporation, not a 

limited liability corporation. Id.; Agency Report (AR), Tabs 14, 15, 17, Database 

Search Results. SBA’s district office, which was only given the CAGE code and 

DUNS number listed in DQSI, LLC’s offer, confirmed that the numbers belonged to 

DQSI, Corporation and sent the Army a checklist showing that DQSI, Corporation 

was an eligible 8(a) firm. Supplemental CO’s Declaration ¶ 3; AR, Tab 16, SBA 8(a) 

Competition Award Eligibility Checklist. 

The discrepancy between the name of the offering entity, DQSI, LLC, as compared to 

DQSI, Corporation, the name of the entity listed in SBA’s 8(a) award eligibility 

checklist, and in every database the Army reviewed, does not appear to have 

concerned the Army. 2

 1

Section 8(a) of the Small Business Act authorizes the Small Business 

Administration (SBA) to enter into contracts with government agencies and to 

provide for performance through subcontracts designed to assist developing small 

business concerns which are owned and controlled by designated disadvantaged 

individuals. See 13 C.F.R. Part 124. Department of Defense agencies have been 

delegated authority to enter into 8(a) contracts on behalf of SBA. Defense Federal 

Acquisition Regulation Supplement Subpart 219.8.

 The contracting officer states that DQSI, LLC’s offer was 

signed by the same person identified as the president and chief executive officer of 

2

The CCR lists the firm’s legal business name as DQSI, Corporation and its mailing 

name as DQSI, LLC. This difference reinforces, and does not resolve, the 

discrepancy. 
Page 3 B-405874, B-405874.2 

DQSI, Corporation. She also states that because she had no reason to doubt the 

veracity of the signature, and given the results of the database searches and SBA’s 

representations, she determined that the offeror was DQSI, Corporation, an eligible 

8(a) firm. Id.

On September 27, the agency e-mailed a notice of award to the person listed in DQSI, 

LLC’s offer as the firm’s senior vice-president. The attached award document for 

signature listed the name of the offeror not as DQSI, LLC, but as DQSI, Corporation. 

Supplemental AR, Tab 2, DQSI Award Notice. That same day, the Army sent W.B. 

Construction a notice stating that the firm had not been selected for award; the 

notice listed the awardee as DQSI, LLC. Initial Protest, Exhibit A. This protest 

followed.

W.B. Construction argues that the awardee, DQSI, Corporation, is not the same legal 

entity as the entity submitting the initial proposal, DQSI, LLC. 3

W.B. Construction asserts that DQSI, Corporation no longer exists because it 

converted to a limited liability corporation, DQSI, LLC, in 2009. The protester 

further alleges that DQSI, LLC did not request SBA’s approval of its change in 

business form and thus is not an eligible 8(a) firm. 

 The protester asserts 

that the award to DQSI, Corporation was an improper circumvention of the 8(a) 

program’s regulations that resulted from the Army’s failure to ascertain whether the 

offering entity and the awardee were the same concern. In this regard, 

ANALYSIS

We will review competitive section 8(a) procurements for compliance with certain 

applicable procurement regulations, Premier Cleaning Sys., Inc., B-249179.3, July 27, 

1992, 92-2 CPD ¶ 51 at 2, but our review generally does not extend to matters that are 

solely within the purview of SBA. Id.; Little Susitna, Inc., B-244228, July 1, 1991, 91-2 

CPD ¶ 6 at 2. Challenges to a small business’s eligibility for award under the 8(a) 

program are generally for review by SBA, not our Office.4 4 C.F.R. § 21.5(b); Basic 

Concepts, Inc., B-299545, May 31, 2007, 2007 CPD ¶ 98 at 4 n.5; see also

 3 W.B. Construction also challenged aspects of the evaluation of DQSI’s proposal; we 

dismissed all but one challenge as lacking a sufficient basis. 4 C.F.R. §§ 21.1(c)(4) 

and (f) (2011). The Army responded to the remaining issue in its agency report and 

the protester did not address the issue in its comments. We consider the issue to 

have been abandoned and will not consider it further. CM Mfg., Inc., B-293370, Mar. 

2, 2004, 2004 CPD ¶ 69 at 3. In its supplemental protest, W.B. Construction argued 

that the Army’s issuance of amendments after initial proposals were submitted was a 

pretext to permit DQSI to lower its price. We dismissed this allegation as an 

untimely challenge to alleged solicitation improprieties. 4 C.F.R. § 21.2(a)(1).

FAR 

4 An 8(a) firm may change its ownership or business structure so long as one or more 

disadvantaged individuals own and control it after the change and SBA approves the 

(continued...)
Page 4 B-405874, B-405874.2 

§ 19.805-2(d).5 Thus, the questions for our review here are whether there was 

uncertainty as to the identity of the offering entity and whether the entity awarded 

the contract was the entity that submitted the initial proposal.

Interested Party

As an initial matter, the Army argues that W.B. Construction is not an interested 

party to maintain this protest because it graduated from the 8(a) program on 

September 26, 2011. However, the Small Business Act provides that an 8(a) contract 

may be awarded to a firm that has completed its period of program participation if 

the prospective contract awardee was a program participant eligible for award on 

the date specified for receipt of offers contained in the solicitation. 15 U.S.C. 

§ 637(a)(1)(C)(ii) (2006 & Supp. IV 2010); see also 13 C.F.R. § 124.507(d). The initial 

date specified for receipt of offers was September 1, CO’s Initial Declaration at 1, 

and there is no evidence that W.B. Construction is ineligible for award. If DQSI, LLC 

is determined to be ineligible for award, W.B. Construction, as the next 

lowest-priced, technically acceptable offeror, is in line to become the prospective 

contract awardee and is, therefore, an interested party to maintain this protest.

Propriety of Award

Uncertainty as to the identity of an offering entity renders an offer technically 

unacceptable, since ambiguity as to an offeror’s identity could result in there being 

no party bound to perform the obligations of the contract. See Dick Enterprises, 

Inc., B-259686.2, June 21, 1995, 95-1 CPD ¶ 286 at 2. The information readily 

available, such as records for incorporation and DUNS numbers, must reasonably 

establish that the differently-identified entities are in fact the same concern. Id.; see 

also Trandes Corp.

 

(...continued)

transaction in writing prior to the change. 13 C.F.R. § 124.105(i). SBA states that its 

records reflect that DQSI, Corporation is an 8(a) program participant and that, prior 

to this protest, DQSI, Corporation had not requested a change in business structure 

approval from SBA. Accordingly, SBA had never approved a change in the firm’s 

business structure. SBA states that, as a result, only DQSI, Corporation is an eligible 

8(a) participant. SBA Statement for the Record at 2. Shortly before this decision 

was issued, counsel for DQSI, LLC, submitted a letter contending that his client had 

informed SBA of its change in business structure and was an eligible 8(a) participant. 

While the matter is in dispute, as noted above, determinations of a small business’s 

eligibility for an 8(a) award are matters for SBA, not this Office. 

, B-271662, Aug. 2, 1996, 96-2 CPD ¶ 57 at 2. Moreover, as a 

5

We will consider a protest against an 8(a) eligibility determination where it is 

alleged that SBA violated or misapplied regulations in making the determination. 

GLR-CMC A Joint Venture, B-281004, Dec. 18, 1998, 98-2 CPD ¶ 152 at 4. The 

protester has made no such allegation.
Page 5 B-405874, B-405874.2 

general matter, the entity awarded the contract should be the entity that submitted 

the initial proposal. Townsend & Co., B-211762, Mar. 27, 1984, 84-1 CPD ¶ 352 at 4; 

Pedestrian Bus Stop Shelters, Ltd., B-212570, Mar. 20, 1984, 84-1 CPD ¶ 331 at 3. 

It is undisputed that DQSI, LLC was the offering entity. Its name is the only name 

that appears anywhere in the proposal. It is also undisputed that the contracting 

officer made award to DQSI, Corporation, the name that appears on the award 

document. 

The contracting officer reasonably turned to the CAGE code and DUNS number in 

DQSI, LLC’s proposal to ascertain the firm’s eligibility for award. CAGE codes are 

assigned to discrete business entities by the Defense Logistics Agency and are used 

to dispositively establish the identity of a legal entity for contractual purposes. URS 

Group, Inc., B-402820, July 30, 2010, 2010 CPD ¶ 175 at 4. Similarly, the DUNS 

numbering system is established by Dunn & Bradstreet Information Services, which 

assigns discrete 9-digit numbers for purposes of establishing the precise 

identification of an offeror or contractor. Id.; FAR §§ 2.101, 4.605(b). These 

numbers are used to identify the entity that is the offeror for a given procurement. 

However, the Army’s searches of various databases using this identifying 

information, as well as the information it received from SBA, revealed a discrepancy 

between the identity of the offering entity and the identity of the entity to whom 

those numbers were assigned. Although this discrepancy introduced uncertainty as 

to the identity of the offering entity, the contracting officer appears to have made no 

effort to ensure that the two entities were the same concern. She did not seek 

clarification from SBA, and there is no evidence that she sought additional 

information from DQSI. Instead, she appears to have simply assumed that the two 

entities were the same because the same person was the vice president and chief 

executive officer of both entities. While this fact may show that there is a 

relationship between the two concerns, it does not show that they are the same legal 

entity, particularly given the differing legal structures denoted by their respective 

names.

W.B. Construction has provided copies of documents, certified by the Secretary of 

State of Louisiana, concerning DQSI, LLC. Comments, Exhibit D. These documents 

show that DQSI, Corporation converted from the organizational form of a

corporation to the organizational form of a limited liability company, DQSI, LLC, in 

2009. As a result, it appears that the entity called DQSI, Corporation no longer 

exists. According to the protester, under Louisiana law, a limited liability company 

and a corporation are different and distinct legal entities formed under different 

statutes--the distinction between the two legal structures is not a mere formality or 

name change.

The record demonstrates that the Army failed to resolve the uncertainty as to the 

identity of the offering entity and its eligibility for award of this 8(a) contract, and 

awarded the contract to an entity that was not an original participant in this 
Page 6 B-405874, B-405874.2 

procurement, and does not appear to be a successor in interest to the offering entity. 

We therefore find that the Army improperly found the firm’s proposal technically 

acceptable and sustain the protest.

RECOMMENDATION

We recommend that the Army review the available information, including that from 

SBA, in order to determine whether DQSI, LLC is eligible for award of this 8(a) 

contract. If the firm is not eligible for award, the Army should terminate its contract 

for convenience and award the contract to the lowest-priced, technically acceptable 

offeror that is eligible for award. We further recommend that the agency reimburse 

the protester the costs of filing and pursuing its protest, including reasonable 

attorneys’ fees. 4 C.F.R. § 21.8(d)(1). The protester’s certified claim for costs, 

detailing the time spent and the cost incurred, must be submitted to the agency 

within 60 days after receiving this decision.

Lynn H. Gibson

General Counsel